WASHINGTON, D.C. – April 3, 2013 – (RealEstateRama) — With the implementation of the Principal Residence Exemption (PRE) Enhancement legislation that passed last year, homeowners are now able to file for the PRE on or before June 1st, or on or before November 1st.
The forms linked below have been updated to reflect recent changes and are also available on the website at www.michigan.gov/PRE.
· Form 2856 – Guidelines for the Michigan Principal Residence Exemption Program
· Form 2602 – Request to Rescind Principal Residence Exemption
· Form 2753 – Batch Cover Sheet for Principal Residence Exemption Forms
· Form 4813 – Assessor’s Affidavit to Waver PRE Denial Interest
If you have any questions, please contact the PRE Unit at (517) 373-1950 or e-mail at ">
In addition, below are a few FAQ’s about the PRE:
How does the PRE work?
A. If a homebuyer purchases a Principal Residence and closes on or before June 1st, they can take advantage of a significant tax break by filing for a Principal Residence Exemption.
When is the additional filing date?
A. November 1st. This allows for tax relief in those communities that still collect a portion, if not all of their non-homestead mills, on the December tax bill.
If my client buys after June 1st this year, what can they expect?
A. If a homebuyer purchases a home after the June 1st filing deadline, and their local tax authority collects all non-homestead mills on the spring tax bill, their property taxes may not reflect the exemption until the next tax bill. If however that local tax authority collects a portion of the non-homestead mills on the winter tax billing cycle, the homebuyer can file for a PRE before the November 1st and exempt themselves from any non-homestead mills collected on the December bill.
What about the foreclosure provisions?
A. Currently, banks have the option of maintaining the home’s Principal Residence status by filing a Conditional Rescission. By maintaining this exemption status, it’s the expectation that borrowers will be able to qualify for financing on these foreclosed properties at the PRE rate and begin paying the lower rate of taxation as soon as they move into the home. To make up for the lost school revenue, banks will be assessed a newly defined tax up to 18 mills (which they presently pay on any foreclosed property) when a property can no longer qualify as a principle residence.
Recently, there has been some concern from lenders and local governments regarding the arduous process of filing to retain the PRE on foreclosed properties and instituting the new specific tax. Many forego the cumbersome process.
House Bill 4135, sponsored by Representative Frank Foster (R-Petoskey) eliminates that requirement for the lenders to pay the 18 mils, while retaining Principal Residence status on the home. This legislation alleviates the “red tape” burden on lenders so that these properties can retain their PRE without interruption, providing quicker turnaround for these properties to get back on the market.
The bill is scheduled to be up for a vote in the House Tax Policy in the coming weeks, and we will keep you updated as this bill makes it way though the legislative process.
